CONNECTING TRADE PROFESSIONALS WITH INDUSTRY INTELLIGENCE AUGUST 2022 EXPERT INSIGHT The workforce of tomorrow in logistics SUSTAINABLE FUELS Overcoming supply chain challenges SUPPLY CHAIN Rethinking value creation to support local content Salah Adib Al Masaood TBA Division has been recognised for trajectorysignificantrecordinggrowthinpopularisinganall-in-onesolutioninUAEandtakingthebrandtonewheights OUT OF THE BOX SOLUTIONS
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LOGISTICS NEWS ME | AUGUST 2022 | 3 IN THIS ISSUE OUT OF THE BOX SOLUTIONS 22 EXPERT INSIGHT THE WORKFORCE OF TOMORROW IN LOGISTICS Dr. Shereen Nassar writes about the key role technology plays in logistics 26 ANALYTICS & SMART TECHNOLOGIES THE SMART NETWORKED FACTORY Salem Machaka writes how analytics can be used for logistics, demand forecasts, production scheduling, and quality control 28 REPORT BAIN & COMPANY Machinery enters brave new world “Beyond the Machine” as digital drives a high-stakes race for growth 32 SUSTAINABLE FUELS OVERCOMING SUPPLY CHAIN CHALLENGES Samer Kaissi writes about how diversifying supply chains can steer electrical vehicles in the right direction 34 SUSTAINABILITY A SUSTAINABLE OUTLOOK G. V. Gomes and Johan Bergwerff discuss the sustainabilitycompany’sinitiatives and the direction in they’re headed toward 38 SUPPLY CHAIN RETHINKING VALUE CREATION TO SUPPORT LOCAL CONTENT Kenan Nouwailati and Omar Alhalabi discuss Saudi Arabia’s transformation and the opportunities that lie ahead for the country 40 INTERVIEW FUTUREPROOFING THE LOGISTICS OF TOMORROW New age technologies across the supply chain can help digitise processes and automate manual practices to enhance efficiency, says Dhruvil Sanghvi, Founder & CEO, LogiNext Al Masaood TBA Division has been recognised for recording significant growth trajectory in popularising an all-in-one solution in UAE and taking the brand to new heights 16 2834
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6 | LOGISTICS NEWS ME | AUGUST 2022 WWW.CBNME.COM All rights reserved © 2022. Opinions expressed are solely those of the Logisticscontributors.NewsME and all subsidiary publications in the MENA region are officially licensed exclusively to BNC Publishing in the MENA region by Logistics News ME. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. Images used in Logistics News ME are credited when necessary. Attributed use of copyrighted images with permission. All images not credited courtesy Shutterstock. Printed by UPP SUBSCRIBE subscriptions@bncpublishing.net For all commercial enquiries, contactTsales@bncpublishing.net+971504402706POBox502511Dubai,UnitedArabEmiratesP+97144200506|F+971 4 4200 196 Keep up to date with all the latest news, features and much more on our website and social media platforms. CBNME.COM CONSTRUCTION@CBNMECBNME BUSINESS NEWS ME CEO Wissam Younane wissam@bncpublishing.net DIRECTOR Rabih Najm rabih@bncpublishing.net GROUP PUBLISHING DIRECTOR Joaquim D'Costa +971jo@bncpublishing.net504402706 BUSINESS DEVELOPMENT DIRECTOR Rabih Naderi +966rabih.naderi@bncpublishing.net503289818 MANAGING EDITOR Kasun Illankoon kasun@bncpublishing.net EDITOR Jochebed Menon EDITORIAL DESIGN Christian Harb MARKETING EXECUTIVE Aaron Joshua Sinanbam aj@bncpublishing.net PHOTOGRAPHER Alexander Bungas EDITOR’S NOTELNME There’s a lot been happening in the delivery sector too. In the past we’ve had big players such as Zomato and Deliveroo capture the market, however in the last few years local companies such as Talabat, Careem Now and noon Food are clamouring in for their share of the market. Making it an even more competitive market. And recently, UAE’s first and only RTAapproved sustainable electric bike logistics solutions provider entered the scene offering on-demand environment-friendly deliveries across Dubai. In fact, the home-grown on-demand electric delivery services provider has signed a Memorandum of Understanding (MoU) with talabat UAE, attaining a month-long pilot phase, offering sustainable deliveries across Dubai, as the regionally renowned eCommerce platform seeks eco-friendly solutions for its deliveries.Globally, the food logistics market crossed the value of USD100 billion in 2021, according to market research firm Imarc Group. The report further suggests that the global market will reach USD154.5 billion by 2027, exhibiting a CAGR of 8.1% during 2022-2027. A report by Statista reveals that UAE is the second largest F&B market for food delivery in the Middle East & North Africa with a market share of USD834 million a year. We’re going to see these numbers increase as newer players enter the market and the economy recovers from the slump caused by the pandemic.
T he food and beverage scene has always been vibrant in the UAE due to the high expat population and the burst of cultures and palates. From high-end luxurious dining to quick home deliveries, the demand for food and drinks continues to grow. In the UAE, we see the F&B logistics sector booming thanks to the abundance of cloud kitchens and secure supply chains. In 2021, homegrown logistics services provider Al Futtaim Logistics, announced its expansion into the food and beverage logistics services. The announcement came as the company scaled up its services to meet the needs of eCommerce and marketplace clients with all-inclusive lastmile home delivery solutions.
Jochebed Menon Editor, Logistics NewsMiddle jochebed@bncpublishing.netEast
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“We are confident that ECI’s trade and project financing support to UAE businesses will reinforce HFZA and SAIF Zone’s visions to solidify Sharjah’s position as a destination for global investments and a busi ness centre in the Middle East while sustaining UAE’s position as an export powerhouse even amid the severe disruptions in the current economic cycle” he added. As per the agreement, Etihad Credit Insurance will offer its range of flexible trade credit insurance and financial solutions – including its Sharia-compliant insurance product ‘ECI Islamic’ – to start-ups and smalland-medium enterprises (SMEs) oper ating in the two free zones. The MoU reflects the shared commitment of the state-owned organisations to devel oping a supportive environment for business and accelerating the UAE’s economic diversification agenda by championing pioneering projects and emerging industries. Through this collaboration, they will jointly conduct seminars and workshops to educate the UAE busi ness community about the benefits of trade protection solutions of Etihad Credit Insurance. By providing coun try risk reports and in-depth market intelligent services, ECI will also help the companies in the free zones to successfully carry out export to for eign countries as well as identify and flourish in new growth markets around the world confidently. Over the last few decades, HFZA and SAIF Zone have emerged as strong pillars of Sharjah’s economic performance. From attracting foreign investment to creating employment and implementing the latest technol ogies, HFZA and SAIF Zone have laid the ground for a future where busi ness transcends geographical borders and economic divisions.
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tihad Credit Insurance (ECI), the UAE’s Federal export credit company, has partnered with the Hamriyah Free Zone Authority (HFZA) and the Sharjah Airport International Free Zone Authority (SAIF Zone) to support Sharjah exporters and re-exporters to start and grow their international business and secure their receivables globally. The strategic initiative will boost the exports from Sharjah, one of the key manufacturing and industrial hubs in the region, and a major contributor to UAE’s non-oil GDP and national employment.TheMemorandum of Understanding (MoU) was signed by H.E. Saud Salim Al Mazrouei, Director of Hamriyah Free Zone Authority and Sharjah Air port International Free Zone Authority and Massimo Falcioni, CEO of Etihad Credit Insurance, in the presence of senior officials of both entities. Underscoring the importance of this strategic agreement, Al Mazrouei said: “Our agreement with UAE Fed eral export credit company is a major effort in unlocking new avenues of financing for companies seeking to open operations in Sharjah. “This deal will strengthen the exist ing initiatives in the free zones to en hance SMEs’ contribution to the local economy with ECI’s insurance and project finance facilities as well as the market intelligence and advisory ser vices. It signifies our collective vision to nurture an entrepreneurial ecosys tem in Sharjah, thereby contributing to the sustainable economic growth of the Meanwhile,UAE.”
Falcioni said: “In line with our strategy to accelerate the UAE’s economic diversification and non-oil trade agenda, ECI is helping to enhance the bankability of SMEs, start-ups and innovative projects launched by younger entrepreneurs across the country. We are honoured to team up with one of the biggest in dustrial free zones in the UAE to em power local businesses and exporters through the state-backed financial and insurance support.”
ETIHAD CREDIT INSURANCE TO SUPPORT SAIF AND HFZA EXPORTERS TO SECURE THEIR BUSINESSES GLOBALLY
Al Seer Marine is a global leader in marine services and has been expanding rapidly in the commercial shipping segment. The company aims to increase its fleet to become the largest in the MEA market and is analysing expansion initiatives in product tankers, gas tankers, and dry bulk shipping sectors, with short-term plans of acquiring 10 to 15 ships in 2022. SEER MARINE TO PROVIDE SOLUTIONS FOR 3M TONNES OF BULK CARGO IN 2022
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A l Seer Marine PJSC (ASM), a global player across multiple marine sectors and subsidiary of International Holding Company (IHC), is expanding to provide freight solutions for bulk cargoes globally through its subsidiary, ASM Chartering.Thissubsidiary will focus on delivering effective and efficient freight services for cargo interests internationally, focused on the Middle East market. As part of ASM’s worldwide growth strategy on commercial management, ASM Chartering intends to transport approxi mately two-three million tonnes of bulk cargoes in 2022.
Guy Neivens, Chief Executive Officer of Al Seer Marine, said: “We have seen a global rise in demand for dry bulk tonnemile trade with 2021 recording a 3.7% increase, while this year, continued growth is forecast at about 1.4%. Al Seer Marine will capitalise on this trend and increase our capac ity, transporting about 2-3 million tonnes of bulk cargoes in 2022.“Given the fragmented nature of this market, we are seizing the opportunity to consolidate cargo volumes and plan to establish a world-class and transparent commercial maritime business through strategic partnerships across the Middle East region.”
At present, ASM manages a total of five dry bulk and general cargo ships and provided freight solutions to an international mining group for approximately 850,000 metric tonnes of iron ore from Asia Pacific to East Asia. Al Seer Marine is currently in negotiations for a long-term contract for carriage of 2 million tonnes annually.
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CHEP’s pallets are easy to spot thanks to their distinctive blue colour and the fact that their name, trademark, and legal title messages are printed on each pallet as well.
Moreover, the collection of CHEP pallets is easy to arrange and is free. CHEP takes care of it and has made this service easy to access via a public contact page for anyone who wants to request a pallet pick-up.
CHEP EMPHASISES PALLET OWNERSHIP RIGHTS
HEP, one of the world’s largest supply chain businesses based on a circular economy, is operating a ‘share and reuse’ concept for the pooling of its 345 million pallets, crates, and containers.
CHEP’s trademark blue pallets, which are the same colour all over the world where they operate, are legally owned by CHEP, and never sold to any third party. CHEP’s business mod el requires that this equipment is returned to the company so that it can be checked, refurbished, and then reused by other customers. Non-returning of CHEP pallets is therefore a legal infringement that can lead to legal action to recover those pal lets.Feras Abual Hamayel, Manager of Asset Management for CHEP Middle East and North Africa said, “As pioneers of the circular economy, we are proud to be one of the most sustain able businesses globally and are passionate about protecting our pallets, and other assets, so that they can fulfil our custom ers’ needs. Unreturned CHEP pallets not only have a negative impact on the environment, but they also add costs to produc ers, retailers and ultimately the end consumers.”
Reusable pallets are durable and of consistent quality and strength, minimizing the chance of customers’ product dam age.The sheer scale of CHEP’s network means that some of its assets inevitably move out of the eco system of the company’s customers, ending up where they should not be, such as with pallet dealers, plastic re-grinders and on non-customer prem ises.Inan ever-changing environment like todays, where pal let availability is key to keep the supply chain moving, nonreturned or destroyed pallets can have a very negative impact on the whole supply chain and ultimately on the end con sumer.CHEP manages the entire administrative procedure, retrieval, and quality assurance of the pallets in a closed-loop system.
Pallet pooling companies like CHEP have been recognised by different international organizations for their contribution to reducing waste and CO2 emissions, as they are considered a key example of the circular economy at a global scale.
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CHEP equipment or its pallets are owned by CHEP. CHEP nev er sells its equipment, and all customers acknowledge CHEP’s full ownership rights. CHEP never transfers ownership of its pallets either. No one can acquire, sell, recycle, or destroy CHEP pallets. All custom ers are required to return pallets back to CHEP.
Leasing pooled pallets is a sustainable and cost-effective alternative to purchasing one-way white wood pallets, which have steadily increased in cost, commonly exhibit quality is sues, and often end up in landfills as waste.
LOGISTICS SIGNS KEY AGREEMENT WITH
ALMAJDOUIE CMA CGM SAUDI ARABIA
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A anArabiaCMALogisticslmajdouieandCGMSaudisignedagreement for the handling and repair of shipping containers at a dedicated depot in Dammam.Almajdouie Logistics COO Kris Brusselmans said: “We are pleased to enter this new partnership and look forward to working together to further enhance CMA CGM Saudi Arabia’s high standards.“Almajdouie has extensive experience providing stor age and repair services to a variety of leading shipping lines, helping to facilitate trade and improve container turnover. The supply chain in Saudi Arabia has gone through a paradigm shift in the last few years and our vision is to help facilitate the Kingdom’s goal of handling 40 million containers annu ally by providing smart, effi cient, and competitive depot services.”Almajdouie’s state-of-theart terminals are equipped with the latest technology and operated by specialized staff adhering to the high est safety standards in the industry.Thefacilities are strategi cally located near the main seaports and industrial cities across Saudi Arabia, and the UAE.Itsterminals operate 24/7 and the team is available to respond to customer re quests and inquiries around the clock. It offers a wide range of services to meet customers’ requirements, including container handling, material handling, and reefer plug-in. Through its con tainer service center, it also offers repair, sea bulk, wash ing, and pre-trip inspection services. Present in Saudi since 1984, the CMA CGM Group oper ates 24 weekly maritime calls from and to Saudi Arabia, connecting the country to major global destinations with a state-of-the-art inter modal network on land. The Group is committed to offer ing the Saudi market com plete maritime and logistics solutions combined with agility, professionalism, and efficiency.MichelAzrak, Gen eral Manager of CMA CGM Saudi Arabia said: “With Almajdouie’s extensive ser vices and the comprehensive range of CMA CGM can offer in Saudi Arabia, this partner ship is a great opportunity for both our companies. Our teams will work together to provide excellence in terms of service to our customers and to respond quickly to market needs.”
tihad Airways, the national airline of the UAE, has become the country’s first airline to join the In-Country Value (ICV) Programme. The Ministry of Industry and Ad vanced Technology (MoIAT) is expand ing the program’s scope to include new sectors like aviation as part of the na tional industrial strategy to sustain eco nomic growth and raise the efficiency and competitiveness of the industrial sector.TheIn-Country Value Programme, part of the UAE’s Projects of the 50, is a pillar of the national industrial strategy and benefits certified companies by increasing local demand for their prod ucts and services. By joining the ICV programme, Etihad Airways will prior itize local suppliers and UAE companies in the procurement process. It will also encourage global suppliers to establish branches in the UAE, attracting more foreign investments to the country. Etihad Airways joins 18 other lead ing national institutions and 45 federal entities that have joined the ICV pro gramme since it launched on a federal level late last year. The programme redirected more than Dhs41 billion in 2021 from implementing entities purchases and services expenses, com pared to Dhs27 billion two years ago. His Excellency Omar Al Suwaidi, Undersecretary of the Ministry and for Etihad Airways said: “The In-Country Value Programme is one of the pillars of the national strategy for advanced industry and technology, Operation 300Bn. It benefits certified companies by increasing demand for their products and services by redirecting government expenditure towards local companies. “The initiative encourages the growth of the industrial sector in the UAE, sup ports the creation of quality jobs, and provides incentives for companies to adopt advanced technologies. Certifi cation is awarded based on criteria such as the value of spending and invest ment in the country, Emiratsation, and the adoption of advanced technology.”
His Excellency said: “The addition of leading Emirati companies like Etihad Airways reflects the advantages pro vided by the programme, such as help ing to boost growth, innovation, and competitiveness.“Theprogramme also helps to cre ate more robust, efficient supply chains and underlines the close cooperation between the ministry, federal and lo cal authorities, and major national companies. Purchasing the services of programme members will become one of the most important means of supporting and empowering the UAE industrial sector over the course of the next 50 years.”
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He added: “As part of our strategy, in 2020 Etihad launched the ‘Al Watani’ local content programme. Since then, we have collaborated with more than 1,000 local vendors, and more than 35% of Etihad’s spending is on purchas es in the UAE market. We aim for this agreement with the Ministry of Industry and Advanced Technology to sustain Etihad’s expenditure on national com panies and enhance the opportunities for local vendors and SMEs in Etihad’s supply activities.” AIRWAYS JOINS UAE’S IN-COUNTRY VALUE
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The In-Country Value Programme aims to increase the number of certified vendors within the programme from 5,000 to 7,300 companies and increase government expenditure on Emirati products and services from Dhs33 bil lion in 2020 to Dhs55 billion by 2025. In 2021, the National ICV Programme succeeded of redirecting expenditure up to Dhs41.2 billion. Tony Douglas, Group Chief Executive Officer, Etihad Aviation Group, said: “Etihad’s participation in the ICV Pro gramme aligns with the airline’s overall vision and demonstrates our commit ment to supporting UAE industry. As the national carrier of the United Arab Emirates, we are committed to support ing local companies, and firmly believe it is important for private sector com panies in the region to cooperate with the Ministry of Industry and Advanced Technology across its innovative pro jects, which seek to achieve the UAE’s future ambitions. “In joining this latest initiative, we can expand our reach to local supply chains, contributing to the develop ment of a sustainable, diversified, and value-added economy for the UAE.
With the latest ISO award, issued by Bureau Veritas – one of the world’s leading testing, inspection, and certification bodies – ADPL became one of the first service providers in the UAE to be fully accredited for supply chain management services cov ering medical devices, equipment, and consumables. The certified services include, import, export, transport, stor age, warehousing, freight forwarding, distribution and valueaddedFurthermore,services.combining the new ISO certification with the reputed Good Distribution Practice (GDP) award against both the European Union (EU) and the World Health Organisation (WHO) standards, also received from Bureau Veritas, further el evates the organisation’s position as a growing global provider of specialised healthcare business services. The services include, logistics and supply chain manage ment, quality management and pharmacovigilance, regula tory compliance, commercial and trading, market access, and value-added services.
A D Ports Logistics (ADPL), a subsidiary of AD Ports Group’s Logistics Cluster, has secured the coveted International ISO Certification for its integrated end-to-end supply chain management services covering medical devices.
AD PORTS GROUP SECURES CERTIFICATION FOR SUPPLY CHAIN MANAGEMENT OF MEDICAL DEVICES
“By securing this important international certification, our team at AD Ports Logistics, serving both the healthcare and life science sectors, is demonstrating our steadfast commit ment to supply chain excellence, and is contributing to Abu Dhabi’s position as a world-class life science logistics hub.
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Robert Sutton, Chief Executive Officer of the Logistics Clus ter, AD Ports Group, said: “As the demand for extensive, spe cialised and increasingly complex healthcare supply chains grows, healthcare logistics service providers will need to con tinue making strategic investments in infrastructure, technol ogy, procedures, and expertise to stay ahead of the curve.
“Given our previous success in securing the world-re nowned GDP accreditation for twin leading standards, ADPL is in an excellent position to serve the global healthcare mar ketplace, and our customers can be rest assured that their products will be handled safely, efficiently, and according to the highest levels of global regulatory and quality compli ance.”Aspart of the certification process, Bureau Veritas rep resentatives evaluated several facets of ADPL’s activities, including handling processes, business continuity planning, cold chain management, competency of staff, and training standards, in line with the best global practices.
COVER STORYLNME “THIS ACCOLADE IS A TESTAMENT TO OUR SINCERE EFFORTS TO PRESENT CUSTOMERS’RESPONDSERVICESSOLUTIONSCONVENIENTANDTHATTOOURNEEDS.”
OUT OF THE BOX SOLUTIONS
A l Masaood’s Tyres, Batteries, and Accessories (TBA) Division was recently presented with the prestigious Global Mobox Award by Bridgestone in Paris, France, for the successful launch of the Mobox solution in Abu Dhabi and Al Ain. When Al Masaood introduced the solution to the region in 2021, it became the first to market the Bridgestone service outside Europe. Since then, it’s been an exhilarating journey for Salah Adib, General Manager, Al Masaood Tyres, Batteries & Accessories Division, and the team.
>>> Salah Adib, GeneralTBAManager,Division,AlMasaood
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SOLUTIONSBOXOFOUTTHE
Al Masaood TBA Division has been recognised for recording significant growth trajectory in popularising an all-in-one solution in UAE and taking the brand to new heights, General Manager Salah Adib tells us more
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18 | LOGISTICS NEWS ME | AUGUST 2022 WWW.CBNME.COM He explains: “We’ve had a successful year in 2021 with our principal brand Bridgestone supporting us to bring MOBOX – the new and efficient allin-one subscription package for buying tires and car maintenance services – to Abu Dhabi, Al Ain, and the Western region. “The launch of MOBOX, which we have piloted for the first-time outside Europe, has been a great suc cess as it provides immense value and convenient mobility solutions to our customers. Our strengthened partner ship with Bridgestone has enabled us to bring innovative and sustainable mobil ity solutions and value-added offerings to our customers.”
What is MOBOX? Mobox is aimed at reducing the pos sibility of unexpected bills by offering a monthly payment scheme for a range of car services and tires. It is designed to reduce the cost and inconvenience of vehicle maintenance. Bridgestone pio neered Mobox in early 2018 in France and then expanded across other Euro pean countries such as Spain, Germany, Italy, and the UK. The launch of the all-in-one MOBOX subscription service in Abu Dhabi is Bridgestone’s first pilot in the MENA Speakingregion. about the award, Adib says: “This accolade is a testament to our sin cere efforts to present modern mobility solutions and services that respond to our customers’ needs. Since its launch, we have witnessed a significant growth in the popularity of MOBOX among our customers, with a substantial num ber of contracts already sold and no letup in fresh subscribers. As an organisa tion that places customer satisfaction as a top priority, we focus on adopting new and simple ways to elevate our customers’ experience with us.” He believes that customer trends and preferences are continually changing. “Today, customers are more and more seeking simple solutions such as leasebased and subscription-based services.
As we constantly monitor new and developing trends, we see MOBOX as an efficient solution to customers’ auto care needs,” Adib notes. “MOBOX is a personal car maintenance subscription that provides customers with a flexible range of services that can be customised such as tires, full warranty, and other car-related services available for a set monthly fee.” Al Masaood TBA are offering three MOBOX solutions to customers: MOBOX Light, MOBOX Plus and MOBOX Premium. He explains: “These packages include two-four tires and services like tubeless valves, tire fitting, wheel balancing, nitrogen filling, wheel alignment, tire rota tion, aircon services, in addition to warranty. Through its monthly subscription scheme, MOBOX can help in reducing the possibility of unexpected bills for tires, as well as reduce the cost and inconvenience of vehicle main tenance.”
The division is continually looking at improving driver safety and tire health, the tie up with Bridgestone for MOBOX is just one of its solutions. Others include the Summer Road Safety campaigns and raising awareness about tire safety among truck drivers to name a few. “We have a primal goal of preserving the safety of our community on the road. Over the past several years, we have taken an active role in the Summer Road Safety campaigns rolled out by Abu Dhabi Police,” Adib divulges. “This year, together with Bridgestone we teamed up with the Integrated Transport Centre in Abu Dhabi, and Road Safety UAE to raise awareness about tire safety among truck drivers, espe cially in the hot summer months. The team carried out truck tire condition inspections at the Mussafah truck weighing station in Abu Dhabi, with a total of 276 truck tires being examined during the campaign.” FROM A WIDE RANGE OF SECTORS HAVE BEEN COLLABORATING TO FURTHER IMPROVE THE ENERGY EFFICIENCY AND ENVIRONMENTAL FRIENDLINESS OF THE TIRE OF THE FUTURE DURING THE PHASES OF PRODUCTION, USAGE, AND RECYCLING.”
Safety and environment-friendly solutions
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The division is also look ing at sustainability and eco-friendly solutions for its business. “Experts from a wide range of sectors have been collaborating to further improve the energy efficiency and environmental friendli ness of the tire of the future during the phases of produc tion, usage, and recycling,” he says. “They have emphasised the necessity to guarantee sustainability, especially in production processes, and to replace tire components with more ecologically friendly Hematerial.”adds:“As far as we are concerned, TBA is installing EV chargers in some of its prime retail outlets in Abu Dhabi to support the transi tion from the traditional fuel engine vehicles to EV cars. As a Bridgestone authorised dealer, we are aware that the firm is making investments in tire development technologies to support EVs on a world wide scale. The Japanese tire company anticipates chang ing its tire offering to address some pressing EV issues.
Fostering employee-oriented growth Overall, Al Masaood TBA under Adib’s able leader ship has prospered. Speaking about his role at the division, he says: “As the head of this department, I ensure its overall operational efficiency - includ ing increasing profitability prospects and maintaining highest standards of customer satisfaction. To keep up with the market trends and adjust to our customers’ changing needs, we are continually seeking to improve our service offerings and elevate our cus tomer experience.”
He adds: “Our company’s suc cess is based on keeping things simple, coupled with our investment in employee skill development. Today, we have young and creative profession als that help us generate new, productive, and out-of-thebox business growth ideas. I believe that the wellbeing of our employees is paramount in the success of our company as they are our most impor tant assets. So, I ensure that they stay motivated by going beyond formalities through ‘personal leadership.’ Not only do I understand what they value, such as earning for their families or fulfilling their dreams, but I also help them achieve their goals by fostering their professional and personal growth.”
For Adib, his goal is to keep serving customers to best of their ability through offer ing quality and value-added soft tire and pitstop auto care services in Abu Dhabi, Al Ain, and the Western Region. He adds: “My team and I are working relentlessly to present a professional and convenient experience to customers that answers to their needs. We also are continuously working towards further improving our range of offerings and techni cal services, all the while keep ing the safety and wellbeing of our Abu Dhabi community top of mind.”
He concludes: “We started the year on a high note and are looking forward to a busy and fruitful remainder of the year.”
“OUR COMPANY’S SUCCESS IS BASED ON KEEPING THINGS SIMPLE, COUPLED WITH OUR INVESTMENT IN EMPLOYEE SKILL DEVELOPMENT. TODAY, WE HAVE YOUNG AND CREATIVE PROFESSIONALS THAT HELP US GENERATE NEW, PRODUCTIVE, AND OUT-OF-THE-BOX BUSINESS GROWTH IDEAS.”
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The global supply chain market is growing expo nentially and encountering major transformations. The growth is unquestionable; according to Allied Mar ket Research, the global supply chain management market size valued at USD15.85 billion in 2019 is projected to reach USD37.41 billion by 2027, growing at a CAGR of 11.2% from 2020 to Technology2027.has become a key player in moving logistics from its traditional recourse to forming an advanced out look supporting its growth. According to a report by UNCTAD, the market for frontier technologies (a group of new technologies that take advantage of digitalisation) could grow to over USD 3.2 trillion by 2023. Advanced technologies such as arti ficial intelligence, robotics, blockchain and the Internet of Things seem to have increasing prominence across sectors and are playing a big role in making the industry more agile and resilient.
THE WORKFORCE OF
Dr. Shereen Nassar, Global Director of Logistics Studies and the Director of the MSc Logistics and Supply Chain Management Programme - Edinburgh Business School, Heriot-Watt University Dubai, writes about the key role technology plays in logistics TOMORROW IN LOGISTICS
Furthermore, educational institutions are tasked with expanding horizons and tweaking curriculums to address future technological needs. According to a survey report by PWC, 74% of respondents are ready to learn new skills or re-train to remain employable in the Furthermore,future. data literacy is another very crucial requirement for logistics personnel. Gartner predicts that by 2022, 90 per cent of corporate strate gies will explicitly mention informa tion as a critical enterprise asset and analytics as an essential competency.
“ADVANCED TECHNOLOGIES SUCH AS ARTIFICIAL INTELLIGENCE, ROBOTICS, BLOCKCHAIN AND THE INTERNET OF THINGS SEEM TO HAVE INCREASING PROMINENCE ACROSS SECTORS AND ARE PLAYING A BIG ROLE IN MAKING THE INDUSTRY MORE AGILE AND RESILIENT.” >>>
New disruption-based advance ments In addition, shifting demographics, advances in logistics technology, and the COVID-19 pandemic have converged to alter how we work, arguably at a rate never before seen in the logistics industry. This requires a workforce prepared to integrate into the new disruption-based advance ments and successfully navigate industry demands. As the industry looks to the future, it is becoming increasingly clear that shifting demographics in the sector are also a catalyst for change within its functionality. As a result, the industry currently needs and will have increased requirements in the future for new talent with appropriate skills and new mindsets, which also means that the older generation is on the way to retirement. The current concerns stem from the fact that if the industry is changing, so is the workforce. Every industry has seen multi-faceted shifts in employee and consumer behaviour and needs through the pandemic. As a result, there is a fear of employees moving due to employers’ lack of priority fulfillment, resulting in the organisa tion losing institutional knowledge and experience. Additionally, due to competitiveness, it is becoming increasingly difficult to re tain employees. According to Gartner (2020), struggling to hire, train and retain logistics talent is the top critical priority for logistics leaders. Historically the logistics industry has used manual processes to man age huge amounts of data and other work. However, recent years have seen the increased adoption of technology across its work processes. Addition ally, the COVID-19 pandemic directly impacted supply chains. As a result, logistics companies urgently navigated increased demands, employee absen teeism, and new health and safety pro tocols, among several other evolving challenges to keep production running. These challenges led many facilities to accelerate their automation initiatives and digitalisation efforts for improved resilience. New technologies Technologies such as robotics, ma chine learning, augmented reality, 3D printing, drones, and unmanned ground vehicles (UGV’s), have been increasingly key in the growth of the logistics sector. As a result, the current workforce will need to extensively upskill themselves to improve technical capabilities and understand the rapid changes that digitisation is causing.
As a result, supply chain organisations must build an employee base with data literacy to be successful. Data literacy is the skill of reading, writing, and communicating data in context, including understanding data sources and constructs, analyti cal methods and techniques applied, and the ability to describe the use-case application and resulting value. It will play a crucial role in employability which will be connected to the growth of an Thereorganisation.arefourkey interdepend ent roles identified for digital supply chains. These are driven by technol ogy, data, end-to-end insights, and innovation. The first is related to the technical skills needed to design, configure, use, and maintain new technologies e.g., 3-D printing, AI, and robotics.
LOGISTICS NEWS ME | AUGUST 2022 | 23 THE WORKFORCE OF TOMORROW IN LOGISTICS | DR. SHEREEN NASSAR
Developing in-demand skills, enhanc ing capabilities, and embracing tech nology will create a futuristic work force that can adapt to changes and be agile. With the industry’s projected growth, it is indeed a fast-growing labour market that needs equipped, motivated, and focused individuals. The sector is set to take on challenges to lead and thrive.
The second is concerned with analyti cal skills that drive scenario planning and data-led modelling to enable the supply chain to inform business deci sions. The third is the orchestration ability to develop end-to-end insights that drive internal and external collaboration. The fourth is about innovation that drives new business opportunities and brings a commercial lens through understanding the big picture. Tech talents Tech personnel must understand and decide if a technology solution is required and is a suitable option. An other important factor that the future workforce needs to consider is their knowledge on sustainability. Globally, sustainability is on the agenda of every industry, and the logistics sector is no different. Understanding the environ mental, financial, and social impacts of logistics will serve advantageously to those looking to work in the industry. Sustainability will be key in securing the future of any industry. And every individual working or looking to work in the sector must acquire the neces sary knowledge to support sustainabil ity. Furthermore, enterprises are now creating employment positions focused on environmental, social, and govern ance (ESG) activities in logistics.
Logistics leaders need to grasp what drives career decision of the future workforce. This should not be limited to compensation and career path. A recent report by Gartner showed that future generations value companies with high corporate social responsibil ity profiles. Future workforces also value innovation, flexibility and shorttrack progression plans. They can move from one job to another in a short time to harness op portunities. They are tech-savvy, and it is challenging for them to cope with outdated systems. Logistics leaders need to demonstrate how the future workforce’s expectations are met to enhance the profession’s awareness. While soft skills such as empathy, adaptability, problem-solving, industry knowledge, and accountability have always been important to employers, the pandemic has further put a spot light on soft skills that will support the growth of employees in an organisa tion. The workforce of tomorrow in logistics will not only be equated with the technological advancements and their grasp on it but also through the ability to constantly adapt to and embrace change. The world as we know it has changed.
“UNIVERSITIES AND EDUCATIONAL INSTITUTIONS ARE TASKED WITH BUILDING A RESILIENT WORKFORCE OF TOMORROW THROUGH EDUCATION.”
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Universities and educational insti tutions are tasked with building a resilient workforce of tomorrow through education that is in line with the industry demands, rapid shifts, and unprecedented changes. Furthermore, for the current workforce it is extreme ly important to upskill themselves to learn relevant skills to advance their careers and contribute to the industry’s growth.
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Salem Machaka, Vice President, Global Professional Services, Infor writes how analytics can be used for logistics, demand forecasts, production scheduling, and quality control
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Judging by the headlines, continuous global logistics issues, prolonged pandemic restrictions, and rising prices for raw materials mean that manufacturers have their work cut out for 2022. In addition, the drive towards sustainability is adding pressure to readjust the manufacturing footprint. Most manufacturers are still stuck with a geographic footprint, which was driven by labour arbitrage around the globe, rather than by factors such as closeness to customers or ecological concerns.
THE SMART NETWORKED FACTORY
Industry 4.0 came with the promise of a smart factory being profitable at the production lot size of one unit. The concept was introduced at the brink of the millennium change with the introduction of cyber-physical systems to share, analyse, and guide intelligent actions for various processes in the industry to make the machines smarter and to lower downtime. Analytics can also be used
Industry 4.0 technologies To increase efficiency, many producers have started to implement Industry 4.0 technologies.
A global view and command structure to react quickly to supply chain challenges. A connected supply chain operating with a single view of orders, shipments and inventory, and shared digital processes provides the visibility needed to improve velocity and the agility to respond to disruptions in a timely and efficient manner. More intelligent automation, using AIdriven insights, can lead to assembly lines that are adjusting automatically. Smart technologies allow smaller manufacturing sites to be situated close to the customers. But how can producers reach fundamental business decisions as to how to relocate manufacturing sites?
The most important ingredient needed is good intelligence. True, manufacturing organisations leverage plenty of data across the operation. But is the data linked up, consistent and treated to enable insightful business decisions? A smart factory is a highly digitized, connected production facility that uses technologies such as artificial intelligence (AI), Internet of Things (IoT) and robotics to help companies manufacture products, create new business value, unlock datadriven insights, and automate or eliminate business processes. These technologies enable people to do their jobs in a more productive and efficient manner while improving quality and overall safety. At the same time, the technologies enable smart factories to self-adapt and autonomously optimise manufacturing operations, helping organizations to compete better amid the many global challenges they face.
Futureproofing So, what are the most important ingredients for a strategy to create the future-proof smart factory? Customers increasingly demand highly personalized products as well as an enhanced customer experience. Manufacturing companies adopt highly agile cloud-based solutions to gain the ability to increase individualisation, service additions, and serve higher flexibility requirements. The need to reduce delays and transport costs, as well as the drive toward a more sustainable production and the imperative to reduce the distance to the physical endconsumer lead organisations to redesign the manufacturing footprint, with the support of leading-edge technologies, to build smaller, smart factories closer to the customer. Smart decisions require end-to endvisibility. This requires a consolidated view across the manufacturing business, including the commercial, the procurement and the operational sides. A tightly linked view and streamlined processes across the order system, shop floor operations, and the supply chain optimize capacity and requirement management and failover alternatives across the entire system.
THE SMART NETWORKED FACTORY | SALEM MACHAKA
for other aspects like logistics, demand forecasts, production scheduling and quality control, capacity utilisation and efficiency boosting. But we still stand at the beginning for leveraging the true potential of Industry 4.0. Smart technologies offer no less than the possibility to redesign the global manufacturing footprint, to position factories closer to markets, reduce logistics nightmares and increase visibility of the ecosystem partners, including suppliers and customers.
Salem Machaka, Vice President, Global Professional Services, Infor “Manufacturing companies adopt highly agile cloud-based solutions to gain the ability to increase individualisation, service additions, and serve higher flexibility requirements.”
Connected supply chains
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T he global machinery and equipment industry stands at a critical moment as it confronts a whirlwind of disruptive forces, facing its leaders with fundamental and accelerat ing change over the next decade. In its first Global Machinery & Equipment Report, Bain & Company analyses the wave of digital-driven transformation sweeping the sector. The report explains how the emerging winners from these powerful trends are embracing “machinery beyond the machine,” experimenting aggressively beyond the industry’s traditional boundaries. It reveals how this strategic approach is propelling winning companies past competitors in a high-stakes race that is turbocharging sales growth and profits—as well as fueling a surge in mergers and acquisitions (M&A) activity and private equity (PE) dealmaking. And it maps out the key moves that machinery and equipment players can make over the next two to three years to tackle this transformational agenda.
Instead, the report shows that the fundamental transition now happening takes the industry “beyond the machine” to “machinery as a service.” This means combining makers’ RACE
FOR GROWTH
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BAIN & COMPANY MACHINERY ENTERS BRAVE NEW WORLD ‘BEYOND THE MACHINE’ AS DIGITAL DRIVES A HIGH-STAKES
“The tectonic shifts reshaping the entire machinery sector are being driven by rapidly intensifying competition, a slowdown in hardware-centered innovation, and the power of digitalization to radically change virtually every aspect of the business,”
Michael Staebe, leader of Bain & Company’s Global Machinery and Equipment practice, said. “The industry’s traditional focus on smarter, faster, cheaper machines as the key to drive growth no longer gives any guarantee of success. Even the most technologically advanced machines, and their makers, are not immune from disruption.”
“The push for more sustainable, diverse, equitable, inclusive, and socially and environmentally conscious operations is the strongest it has ever been.”
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Karim Shariff, Partner at Bain & Company Middle East and leader of Bain & Company’s EMEA Construction, Building Products, Real Estate and B2B Services practice
hardware with software, automation and services developed around the machines. It means delivering tightly integrated solutions that are precisely tailored to customers’ needs—and within dramatically altered new business models. “The industrial machinery and equipment sector has reached a turning point. While the industry never stood still, regionally, it is currently experiencing the most profound transformation in decades. The push for more sustainable, diverse, equitable, inclusive, and socially and environmentally conscious operations is the strongest it has ever been. We see senior executives investing heavily in digitization and this is affecting talent retention and workforce management. These changes are being expressed at various speeds depending on the subsectors, which is leaving decision makers in significant ambiguity,” said Karim Shariff, Partner at Bain & Company Middle East and leader of Bain & Company’s EMEA Construction, Building Products, Real Estate and B2B Services practice. Services-based solutions are “shape of things to come” for machinery The report sets out how this critical shift to a digitally-enabled and servicesbased ‘bundled solutions’ model is already developing at pace. Bain & Company’s research projects that in the industrial automation sector, where this shift is well underway, the share of profits coming from hardware will fall from 31% today to just 23% by the end of the decade. The rest of the profit will come from bundled software, services and solutions. In some sectors, companies already generate more than half of sales and 100% of their profits from“Thisservices.trendis accelerating and will become the norm—the shape of things to come—for the industry in the next few years,” Thomas Lustgarten, leader of Bain & Company’s Global Advanced Manufacturing & Services practice, said. “By 2030, Bain projects that the leading machinery companies will sell most equipment as only a part of bundled solutions that include software and services, further cutting hardware’s contribution to profits. In many cases, companies making this shift have the chance to capture market growth rates several times those of their current businesses.”
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Those that fail to climb the software and automation ladder, focus on tailored solutions for “verticals” specific sectors, and adapt to the new business models, will be at risk from the growing commoditization of machines sold purely as hardware. Chinese manufacturers are rapidly developing competing, lower-cost hardware.
“Great Retooling” for global sustainability and net-zero creates multi-decade opportunity
“Industrials that put effort into digital are four-times more likely to outperform the competition—but two out of three digital laggards are worse performers than the competition, according to Bain & Co.’s 2019 survey of 205 industrial businesses,” Lustgarten adds.
The sweeping machinery sector transformations triggered by the forces of digitalization and “Industry 4.0” are only part of the story for the machinery and equipment sector, however. The reshaping of the industry also presents an enormous opportunity for its companies to give a powerful response to the global push for businesses of all kinds to meet and master the challenges of sustainability and environmental responsibility: to become more energy efficient, less wasteful, and to tailor operations to improve the circularity and recyclability of machinery products.
China’s industry vanguard of innovative insurgents drives imperative for strategic change
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Thomas Lustgarten, leader of Bain & Company’s Global Advanced Manufacturing & Services practice
As in other industries, machinery makers are already changing operations and supply chains to reduce greenhouse gas and carbon emissions and pursue net-zero goals. But for this sector, the implications go deeper. Because every industry is changing, a “Great Retooling” is underway as nearly every industrial and manufacturing company rethinks its operations. Machinery businesses that quickly grasp the potential and develop the products and services to allow customers to meet decarbonization goals, are likely to gain first-mover advantage in a huge transition set to last decades rather than years, the report finds. Spate of supply chain shocks fuel retooling for resilience The global opportunities of rising to sustainability goals, as well as from this Great Retooling trend, are closely tied to the challenge posed by a new era of supply chain vulnerability. Over the past two years, a spate of major supply chain disruptions has battered the machinery sector, from materials shortages and price fluctuations sparked by the global pandemic to, most recently, the consequences of the war in Ukraine. These and future unexpected disruptions reinforce and extend the market for machinery makers to equip customers for the future with the equipment that ensures more resilient and sustainable supply chains. Bain & Company’s research shows that supply chain executives across all industries have shifted investments to prioritize resilience and flexibility over cost and speed. Machinery companies are on the front line to provide the tools and equipment to meet these objectives while simultaneously meeting the urgent aim of greater resilience for their own operations. Digital tools are important here, too, and can help firms manage supply chain risks, improve efficiency and measure environmental impact and cost in real Companiestime. at the forefront of this evolution have a head start in building competitive advantage in the markets of 2030 and beyond. They are building new capabilities, such as supply risk assessments, to bolster their customers and their own operations. As such, they will also bounce back faster in times of supply disruption and gain from a tailwind of support from customers, investors and regulators.
While the machinery sector’s winners over the coming decade will move aggressively to expand their business ecosystem beyond machinery, other companies will struggle to keep up.
Among the top machinery companies, Bain & Company found that the average annualized total shareholder return was 32% from 2019 to 2021, compared with a mere 4% among the industry’s laggards. But most machinery and equipment companies have so far been slow to act. Bain finds that fewer than 5% of industrial companies have successfully executed a technologically or digitally based transformation.
The competitive challenge is underscored by the reality that China is also in the vanguard of the broader industry trends examined in the report, with Chinese tech start-ups and other insurgents introducing a new generation of innovative service offerings. The cloud service Machine Commander, offered by the Chinese startup Zeaho, offering real-time monitoring of construction sites to improve equipment efficiency is one example: it has 135,000 units of equipment connected to its cloud-based platform just seven years since it was founded. To defend their turf, equipment markets are increasing investments in digital technologies and accelerating the rollout of advanced services. For example, 100% of original equipment manufacturers (OEMs) surveyed by Bain & Company plan to offer “predictive maintenance” of machines by 2024. 95% will provide remote maintenance, and new services geared to operational efficiency. M&A jumps to decade-highs as companies accelerating moves to buy in capabilities The wave of change across the machinery sector is also stimulating a surge in dealmaking as many companies and their investors reshape business portfolios in the face of the evolving industry dynamics. Industrial machinery manufacturers have a growing appetite for big deals as they accelerate these strategies.Thejump in M&A activity means that the average deal size in the sector shot up to an average of $179 million in 2020 and $161 million in 2021 breaking the prior downward trend seen up to 2017. Last year’s $63 billion global deal value was the sector’s second highest annual total in the past decade, only exceeded by 2020’s $72 billion tally. “For machinery executives, M&A provides access to higher-growth and strategically-critical markets. These leaders are leaning-in to acquire new capabilities around software, the Internet of Things (IoT), artificial intelligence and connectivity – and at higher valuations, as they move to meet the challenge from the sector’s digitalization and move to servicedriven, solutions-based business models,” Michael Staebe said. “We don’t expect momentum to slow for large M&A deals in the machinery sector.”
Winning PE firms are spotting opportunities to reposition traditional machinery businesses amid the broad trends reshaping the sector. Top performing funds are taking a holistic approach to value creation, looking well beyond cost structures to tap all areas of potential improvements, including commercial and service excellence, pricing, and M&A potential.
BAIN & COMPANY
PE drives faster pulse of machinery dealmaking on rising valuations and returns As in M&A, the machinery industry is now among the most active industrial sectors for global PE dealmaking—and machinery and equipment deals are outperforming those in other industrial sectors.Some of the largest industrial PE deals have been in machinery, such as Advent and Cinven’s €17.2 billion ($20.2 billion) purchase of Thyssenkrupp Elevators in 2020. Over the past decade, Bain & Company finds that such deals produced returns 10% higher than for industrials as whole, as shown by a median multiple on invested capital (MOIC) of 2.5. Over the same period, the enterprise value of machinery companies grew 1.9-fold.
Michael Staebe, leader of Bain & Company’s Global Machinery and Equipment practice
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Diversifying supply chains To address such challenges in the future, there is a need to diversify supply chains. Moreover, the public and private sectors must adopt an integrated approach to secure the EV supply chain, right from the design and production of a new CHAIN CHALLENGES
OVERCOMING SUPPLY
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Lured by the prospect of tax incentives and deterred by rising oil prices, a growing number of consumers are making the shift to Electric Vehicles (EVs). According to the latest industry figures, Ford recorded EV sales growth rate of 139%, Tesla reported 81% growth and Volkswagen 65%, as of May 2022.
Deloitte anticipates that the world is on course to reach annual EV sales of 31.1 million by 2030. This is encouraging news for EV manufacturers, who are grappling with securing supply chains. Shortages of key materials like lithium batteries, ongoing sanctions against Russia (a key market for raw materials like nickel), impact of COVID-19 lockdowns, amidst other regulatory challenges, could curtail manufacturers’ ability to meet growing demands.Furthermore, raw materials necessary for EVs are mined only in certain parts of the world, and their lack of availability directly impacts prices. Batteries and electronic parts are largely sourced from Asia. In fact, China is a leader in the lithium battery market, with the country manufacturing 60% of global battery components. But the pandemic-induced lockdowns have badly affected global production and supply chains.
SUSTAINABLE FUELS
Samer Kaissi, Country Manager Dubai and Northern Emirates at DHL Global Forwarding, writes about how diversifying supply chains can steer electrical vehicles in the right direction
Addressing bottlenecksinfrastructure
vehicle, all the way through reclamation and recycling programs, and beyond. Given that the automotive industry is undergoing drastic evolution, with convergence between engineering and modern technology, logistics companies must also adapt their offerings.
Samer Kaissi, Country Manager Dubai and Northern Emirates at DHL Global Forwarding
There is an urgent need to manage the complexities of storing parts for different EV variants, amidst regulations constraints. Given that there is no standard battery size – lithium-ion batteries come as battery cells, modules, and packs – more logistical planning by automakers is needed as original equipment manufacturers (OEMs) have different sourcing strategies for all PWCthree.anticipates that the lithium-ion battery pack alone can account for up to 50% of the value of EVs. Battery prices, which had fallen in recent years, suddenly went up to an estimated USD160 per kilowatt-hour in the first quarter of 2022 from USD105 last year. Many of these batteries are made by companies outside the traditional auto supply chain, which has created competition with legacy suppliers. Some EV battery suppliers are also developing expertise in manufacturing electric powertrains, which presents a shrinking potential market for suppliers and narrower margins as EV adoption rises. In short, suppliers that provide components for ICE vehicles will have to diversify to retain a share of the market, or risk falling revenues. Auto makers, OEMs and aftermarket suppliers must invest in the right logistics framework to manage EV components, despite regulatory constraints. Access to the right infrastructure, including temperature-cooled shipping containers and managed customs-clearance solutions, can minimise the actual burden for business in the long run and help establish a reliable supply chain for EV production.
“Auto makers, OEMs and logisticsinvestsuppliersaftermarketmustintherightframeworktomanageEVcomponents,despiteregulatoryconstraints.”
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The UAE has set ambitious targets to transition to EVs, with Dubai aiming for government organisations to increase the number of purchased or leased electric and hybrid vehicles to 20% from 2025 to the end of 2029, and 30% from 2030. This is encouraging, but there is a need for compliant and cost-efficient supply chains that support EV development to support this growth. The batteries powering these EVs will need maintenance, repair, and exchange, which in turn requires a way to transport replacements quickly and safely on a regular basis. Being able to transport them via freight makes this process far faster than ever before. But a conveniently located hub would accelerate the growth of EVs in the region. In anticipation of a booming lithium-ion battery market, DHL launched a 23,478-sq m EV and battery logistics hub in Dubai South earlier this year. It includes a 652-sq m EV battery storage area, which can be expanded to 2,000 sq m, to support future growth. It is the region’s first compliant facility for EV batteries and other dangerous goods. The hub enables the EV circular economy – batteries can be stored, recycled, repaired, and processed at end of life – ensuring long-term sustainability.
Emirates Logistics’ G. V. Gomes, General Manager – Fleet Logistics and Johan Bergwerff, Managing Director sit with Jochebed Menon to discuss the company’s sustainability initiatives and the direction in they’re headed toward
34 | LOGISTICS NEWS ME | AUGUST 2022 WWW.CBNME.COM SUSTAINABILITYLNME A SUSTAINABLE OUTLOOK
According to the Interna tional Energy Agency, the transport sector account for 21% of global carbon emissions. This has caused many logistics companies like Emirates Logistics in the region to explore renewable energy source to power their businesses. Emirates Logistics, the logistics vertical of Sharaf Group, has gained a name in the market for being a reputed logistics firm offering total supply chain services such as 3PL logistics, land transport, freight forwarding, reloca tion, eCommmece & last mile delivery, breakbulk cargoes, and custom broker age services.
G. V. Gomes, General Manager – Fleet Logistics, Emirates Logistics
Since its inception Emirates Logistics has made strategic investments in in frastructural development, worldwide agent network and technological exper tise, enabling its speedy acceleration as a renowned and successful brand both in UAE and Middle East Subcontinent & Africa catering to some of the top brands in retail, furniture and FMCG sector. The firm has also strategically established itself in the Middle East, Southeast Asia and the Indian subcon tinent, enabling to grow and expand into newer markets aligned with their client’s expansions plans. Today Emir ates Logistics has its global footprints in India, Pakistan, Saudi Arabia, Morocco, Malaysia, Egypt and Kenya. And has multiple distribution cent ers in each country and transport and logistics support capabilities to cater to the growing volumes and capacities of their clients. So with 54 office network across continents and 1,700 grow ing workforce Emirates Logistics has built its brand as a logistics provider for their clients who can be steadfast, secure and importantly flexible to their clients changing needs).
As it began its global expansions, the company focused its resources on sus tainability and the environment, which are now key priorities of its business strategy. Eco-friendly logistics Managing Director Johan Bergwerff reveals: “From solar panelling in our warehouse, to energy saving initiatives in the offices, and electric vehicles for transport. We believe logistics can be conducted in an eco-friendly and sus tainable manner where all parties come outHewinners.”adds:“As a company, we are constantly researching and developing more sustainable, efficient, and costeffective ways of providing logistics service to our customers. In line with the global 2030 sustainability develop ment goals, we are setting our internal objectives and targets to achieve in the coming years. We started our electric vehicle truck testing and implementa tion project two years ago and we are now proud to provide this service to our customers in the UAE and looking forward to implementing this in other territories.”
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Johan Bergwerff, Managing Director, Emirates Logistics
Emirates Logistics’ main warehouse and office in Jebel Ali & DWC Free zone and its electric vehicles fleet are powered by solar energy generated from the rooftops of its warehouse. In 2019, the company began the testing of electric trucks and after a two-year period, Emirates Logistics introduced two varieties into its fleet – a 6x4 heavy truck and a three-tonne box pickup.
The Dubai Electricity and Water Au thority (DEWA) approved fast charg ers enable the trucks to be charged 100% in 20 to 30 minutes.
The journey so far hasn’t been easy, Gomes and the team have had to cross my“Whenhurdles.you are implementing something new in a region, there will always be challenges. The main chal lenge was educating the market on the benefits of EV transport so that the industry can move in the right direction. We also continue to face challenges in charging infrastructure in the region that we hope will grow as the region becomes more aware and educated about electric vehicles and its benefits.” Up next Going ahead, Emirates Logistics aims to have an all-electric vehicle fleet. Bergwerff explains: “We hope to implement an EV fleet for transport across all our locations globally. We understand that every region will pose its own set challenges, but we are confident that we have the knowledge, experience, and capability to overcome these challenges.”
Electric trucks G. V. Gomes, General Manager – Fleet Logistics explains in detail: “All our electric vehicles are classified as BEV, which stands for Battery Electric Vehicles. They run completely on electricity provided by the battery of the vehicle that is charged daily by DC fast charges that we installed in our warehouse premises. We are currently running two types of vehicles in our operations the 6x4 heavy trucks that are used for container movement in the freezone which can carry a payload of 35 tonnes and with an energy capacity of 200kms on 100% charge, and the three-tonne box pickups that is being used for distribution of cargo locally inside UAE which can carry a payload of three tonnes and can run upto 300kms on 100% charge.”
Highlights and challenges Gomes tells us that the team and well as their clients are ecstatic to have the EV trucks in operation after a two-year testing period. He adds: “Our demanding customers promote sustainability and environmental responsibility in their operations. We are pleased to provide solutions and initiates such as EV transport to help meet that requirements and goals. “When you are a market leader every milestone achieved is a highlight, right from identifying the exact vehicle manufacturing partner, to importing, setting-up the charging infrastructure, to testing and mobilising the fleet. We are proud how our achievements will contribute to moving the regional transport and logistics industry in a more sustainable and environmentally responsible direction.”
Bergwerff believes the logistics sector is undergoing a major shift and will continue to do so for the next few years. “With the surge in diesel prices and sustainability goals in the region, we can expect to see massive changes in vehicles and transport infrastruc ture.“For domestic transport, we expect there will be a shift to electric vehicle combined with sustainable energy sources such and solar and wind energy. In the long distance and cross border transport we can expect to see a shift to intermodular transport us ing a combination of rail and electric vehicles giving users a carbon neutral solution.”
The firm is also looking to replicate its development in solar powered warehouse operations across all its businesses. He adds: “We will con tinue to research and developed more sustainable, efficient and cost-effective ways of doing logistics.”
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RECOGNIZING INDIVIDUAL EXCELLENCE, CORPORATE STRENGTHS, AND PROJECT SUCCESS #LNMEAWARDSFACEBOOK.COM/LOGISTICSNEWSME @LOGISTICSNEWSME LOGISTICS NEWS ME CBNME.COM LOGISTICS TRANSPORT& 2022 AWARDS SEPTEMBER 16, DUBAI | SOFITEL DUBAI THE OBELISK
Astrong supply chain network is a key enabler for a country’s resilience and ability to provide for its local needs while playing a significant role in the global supply chain linkages. The global supply chain disruption witnessed as result of the pandemic has challenged this resilience from multiple fronts. Managing business continuity during disruptive times became a primary concern for many organisations. This can be achieved by developing greater resilience through the build-up of a world-class digitally enabled supply chain.Anew KPMG publication delves into Saudi Arabia’s transformation phase and the opportunities ahead for the country to leapfrog other countries to establish datadriven local supply chains. Leveraging
KPMG’s Kenan Nouwailati, Head of Procurement, Supply Chain and Local Content Advisory and Omar Alhalabi, Director, Global Strategy Group discuss Saudi Arabia’s transformation and the opportunities that lie ahead for the country
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Sector strategy As such, the Kingdom has already developed a sector strategy to improve supply chain efficiencies to increase locally sourced products and services, as well as adopt Industrial Revolution 4.0 technologies.Currently,manufactured parts in the Kingdom constitute less than 10% of the annual spending on spare parts. Over the next decade, the country plans to spend more than SAR1 trillion purchasing industrial equipment and spare parts, excluding military. These investments are predominantly set to be spent overseas (75%) with limited value-add to the local economy – this presents an opportunity for a significant localization of the supply chain for industrial products.
RETHINKING VALUE CREATION TO SUPPORT LOCAL CONTENT
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Data to Establish Local Supply Chains, the new publication by KPMG, takes learnings from best practices from other resource-rich countries that strived to diversify their economies and build up domestic manufacturing industries.
The strategic directions to boost promising sectors in Saudi Arabia have been set out by NIDLP. In its assessment, NIDLP identified 15+ sectors in the Kingdom that would need screening to define priorities and ensure maximum value generation via localization.
Selected assessment parameters Prioritizing sectors would require an initial assessment of their maturity within the Kingdom and region, using a set of selected assessment parameters such as share of GDP contribution, demand (local, regional, global), capacity to attract foreign direct investment, barriers to entry, capacity to generate employment, sales, and exports. In addition, the sectors in focus should also be aligned with the objectives of Vision 2030, which defines mining and energy sectors among its top priority sectors.Saudi Arabia has also established a Local Supply Chain Development Initiative (LSCDI) to provide an information platform and tools that lead to the establishment of local supply chains that are integrated, sustainable, and expected to facilitate the development of locally integrated industries.
The Ministry of Industry and Mineral Resources (MIM) has embarked on a journey to boost the localization efforts in the industrial sector. These efforts are driven by Vision 2030 and the National Industrial Development and Logistics Program (NIDLP), with a primary focus on the energy, mining, industry, and logistics sectors.
“Once implemented and operational, the LSCDI will help raise awareness of local supply chains – structure, gaps, database, supporting industrial network, and visibilityincreasingofSMEs.”
Once implemented and operational, the LSCDI will help raise awareness of local supply chains – structure, gaps, database, supporting industrial network, and increasing visibility of SMEs. Open government best practices have been leveraged by Saudi Arabia to help enhance transparency and competitiveness in government procurement. With an aim to transform Saudi Arabia into a leading industrial powerhouse and international logistics hub, the latest venture came from the NEOM project, with the announcement of Oxagon, which is set to become a leading modern manufacturing and industrial research and development (R&D) facility. Promoting localisation Close coordination among entities concerning policies and actions will allow LSCDI to achieve its commitment to supporting local supply chains in the Kingdom. With the MIM spearheading the initiative, it will be the National Industrial Information Center’s (NIIC) role to lead and orchestrate the coordination of data and information among all the entities to promote localization.
Saudi Arabia has the potential to pave its path to becoming a global powerhouse in the manufacturing sector and support its goal of building a resilient future.
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Local content policies are commonly used in resource-rich countries with varied goals and degrees of success. Investments in supply chain infrastructure, a strong local value chain and an integrated industrial ecosystem allow policymakers to have a holistic understanding of the parts that need to be put together to develop a successful program instead of focusing on incentivizing single products and services.
“the Kingdom has already developed a sector strategy to improve supply chain efficiencies to increase locally sourced products and services, as well as adopt Industrial Revolution 4.0 technologies.”
RETHINKING VALUE CREATION TO SUPPORT LOCAL CONTENT
The Kingdom’s efforts are driven by two key areas of focus: developing local content and implementing concepts of the Industrial Revolution 4.0. As global supply chains become more complex and continue to be sensitive to disruption, it makes sense to call for national agendas and development of local content.
Omar Alhalabi, Director, Global Strategy Group Kenan Nouwailati, Head of Procurement, Supply Chain and Local Content Advisory, KPMG
40 | LOGISTICS NEWS ME | AUGUST 2022 WWW.CBNME.COM INTERVIEWLNME FUTUREPROOFING THE LOGISTICS OF TOMORROW New age technologies across the supply chain can help digitise processes and automate manual practices to enhance efficiency, says Dhruvil Sanghvi, Founder & CEO, LogiNext
WHICH ARE THE KEY TECHNOLOGIES INFLUENCING THE LOGISTICS SECTOR TODAY?
TELL US ABOUT LOGINEXT AND YOUR SOLUTIONS FOR LOGISTICS AND SUPPLY CHAIN SECTORS. LogiNext is a SaaS based delivery management platform that can be used by enterprises across industries- F&B, retail, CEP (cou rier, express & parcel), FMCG and transportation. LogiNext Mile is the flagship product used by brands to digit ise, optimise and automate logistical operations. Be it first mile movement from warehouse to hub, middle mile movement be tween hub to hub or the last mile from hub to the end customer, the LogiNext platform can be used to simplify end-to-end logis tics.
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FUTUREPROOFING THE LOGISTICS OF TOMORROW
There are several technologies like IoT, autonomous robotics, artificial intelligence and machine learning that influence the lo gisticsAreassector.likeinventory management with capacity utilisation, real time visibility, automated order allocation with route optimisa tion and delivery driver management are areas where technology has brought in a revolution. All of these technologies across the supply chain help in digitising processes and automating manual procedures to improve efficiency.
The last mile accounts for about 53% of the entire delivery chain. There are several reasons for this and technology is an aid in the following ways:
1. The end customer is not at home/failed delivery attempt: 5% of all orders fail to get delivered in the first attempt. Technology can help fix this through a driver chat or real time communication wherein a customer can inform the driver and dispatcher that he or she isn’t home and provide an alternative time window.
2. Driver management: Many brands don’t have a clear estima tion on the number of drivers that would be required for effi cient deliveries. Hybrid fleet management technology solves this issue by forecasting demand, showing pre-order ETA, position ing of drivers in areas of high order density and dynamic order allocation.
ACROSS THE DELIVERY CHAIN, LAST MILE IS THE MOST EXPENSIVE AND TIME-CONSUMING SEGMENT OF THE JOB. HOW CAN TECHNOLOGY MAKE LAST MILE AFFORDABLE?
“LOGINEXT MILE IS THE FLAGSHIP PRODUCT USED BY BRANDS TO DIGITISE, OPTIMISE AND AUTOMATE LOGISTICAL OPERATIONS.”
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WHAT ARE SOME OF THE CHALLENGES LOGINEXT FACES TODAY? The biggest challenges that the logistics sector faces are the lack of digitisation and change management. We’re put ting in a lot of effort to highlight the benefits of technology and how it can create a positive impact on businesses. Digitisation and sustainability are on the agenda of many enterprises, but more emphasis is required, and brands need to move quicker to stay in line with customer expectations and the realities of the modern times.
INTERVIEWLNME
WHAT IS LOGINEXT’S SOLUTION TO REM EDY HIGH LAST MILE DELIVERY COSTS? LogiNext Mile is a D-I-Y platform which can be setup in a matter of minutes. There are hundreds of APIs through which an enterprise can start using LogiNext on top of their existing systems without any hassle. Apart from this, the carrier inte gration marketplace is a unique feature of the LogiNext platform which allows brands to add carriers at the click of but ton enabling them to deliver much more efficiently in the last mile.
WHAT’S NEXT FOR LOGINEXT IN THE REGION? We have more than 20 enterprise cus tomers in the Middle East region and the number is growing fast. We have an office in Dubai and plan is to double down our efforts in the region to de liver more success stories. The Middle East is a key market for growth for LogiNext and we’re actively hiring as well as increasing customer support in the region. We aim to grow at least by 100% in the coming year in the Middle East.
3. Better customer experience: Use of technology provides a great delivery ex perience that leads to customer retention and more repeat orders. Regular custom ers in turn leads to more sales and quicker deliveries since the process is streamlined and the system already knows customer preferences.
IN YOUR OPINION, HOW CAN THE LOGISTICS SECTOR BECOME MORE EFFI CIENT – ESPECIALLY AS WE’RE SEEING A HIGH DEMAND FOR SAME DAY/ 60 MINUTES DELIVERY TIMES? Technology and automation is the way forward. Same day delivery and quick commerce requires a lot of informa tion and data on the basis of which efficiency can be improved. Forecast ing demand, accounting for peak hour sales and fluctuations, advanced route optimisation and the rise of dark stores are some of the trends paving the way for more efficiency in the logistics sec tor.
COMPARED TO THE REST OF THE WORLD, HOW DOES THE MIDDLE EAST FARE REGARDING LOGISTICS AND SUP PLY CHAIN EFFICIENCIES? In our experience, the Middle East is one of the fastest growing regions in terms of adopting technology in the supply chain. The North American market is the most developed but the Middle East and APAC is catching up fast especially with region specific inno vations coming up. We expect the Mid dle East to lead the way when it comes to premium shipping.
4. Route optimisation: Without technol ogy, drivers rely on memory and can’t optimise delivery routes. A route optimi sation algorithm takes in several patterns like weather conditions, traffic conditions and customer preferences to assign and deliver orders in the most optimum way. This in terms reduces delivery cost as less distance is travelled by drivers in the last mile.
“IN OUR EXPERIENCE, THE MIDDLE EAST IS ONE OF THE FASTEST GROWING REGIONS IN TERMS OF ADOPTING TECHNOLOGY IN THE SUPPLY CHAIN. THE NORTH AMERICAN MARKET IS THE MOST DEVELOPED BUT THE MIDDLE EAST AND APAC IS CATCHING UP FAST ESPECIALLY WITH REGION SPECIFIC INNOVATIONS COMING UP.”
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